Business Week: Why are Saudis applauding cheaper oil?

[nam78_two]

http://www.businessweek.com/globalbiz/content/oct2006/gb20061004_128130.htm?chan=rss_topStories_ssi_5


Unbelievable as it may sound, Saudi Arabia is practically applauding the 22% plunge in global oil prices since July. On Sept. 19, Saudi Oil Minister Ali Naimi called a price of about $60 per barrel "reasonable." Analysts think the Saudis could even live with a price in the mid-$50's per barrel. "The Saudi price target is probably lower than the rest of OPEC; they are still happy at $50 per barrel," says David Kirsch, an analyst at PFC Energy in Washington.

Why would the kingdom, which boasts the world's largest oil reserves, cheer a price slump? In fact, the Saudis never felt comfortable with $70 oil, fearing that sky-high prices might kill off the global appetite for their single source of wealth.

"There is concern that the volatility in the markets is so beyond anyone's control that it could cause severe damage to the world economy," says Sadad Al Husseini, the retired exploration and production chief of Saudi Aramco, the national oil company. The Saudis, he says, "are determined to try and manage better."

[TygrBright]

1. Pretty frickin' easy to answer... they're terrified that we'll...

...finally reach the tipping point and develop other energy sources to rely on, plus a whole new technology for using them. That would turn the House of Saud back into second rate tribal chiefs mediating disputes about livestock herding routes.

acidly,
Bright

[nam78_two]

4. Bingo and also

I think they could have gotten a nudge-nudge wink-wink from their BFFs in the WH indicating that a drop in prices right around now may be ummm convenient for all ;)...

yup....notmuch of a mystery there...

[Burried News]

2. Because they hold alot of dollars and the dollar is in the

:hurts:

[lildreamer316]

3. Yes...they want to continue to be the FIRST source for oil.

It of course would be difficult,but not impossible for us to put someone else as our main source for oil, including ourselves in a way (recent discovery in the Gulf, raiding the Alaskan resources, etc.) I'm not recommending that, just saying I think we should be suspicious of thier reaction.There are multiple reasons they would behave this way-not the least of those being their friendship with the Bush family.